Qantas’ pilots union says Qatar-Virgin deal a ‘sham’ arrangement which won’t benefit Australians

The Australian and International Pilots Association, representing Qantas aircrew, says Qatar is exploiting a loophole and won’t pay any tax here nor be subjected to Australian industrial law.

The head of the Qantas pilots’ association has criticised plans for Qatar Airways to operate international flights on behalf of Virgin Australia, saying it’s a “sham arrangement” that will have no benefit to Australian workers.

The proposed “wet lease” deal due to begin in mid 2025 would result in Virgin selling tickets on flights to Doha operated by Qatar Airways’ aircraft and crew.

Australian and International Pilots Association president Tony Lucas said it appeared Qatar Airways was taking advantage of a “fairly big loophole” and using Virgin Australia’s outbound air rights to fly back into Doha, in what he called a sham arrangement.

“I don’t think any of us mind competition but this seems a good way for Qatar to try to damage the Australian aviation industry for their own purposes, particularly given they’re employing pilots and flight attendants in a very low cost regime in Doha,” Mr Lucas said.

“If you’re thinking about what it means for Australian jobs, it’s four routes – so probably eight aircraft – which means about 280 pilots and 1300 flight attendants that are not being employed in Australia.

“They’re being employed in Qatar so they won’t pay Australian tax and they won’t contribute significantly to the Australian economy.”

He said there was “no representation of pilots or flight attendants allowed in Qatar” and they would not be subjected to Australian industrial law.

“The entire thing just feels like a bit of a sham arrangement. The government introduced closing loophole legislation to try to protect the rights of Australian workers and this just seems to be a loophole to get around those protections in favour of a foreign entity,” he said.

“The whole operation just feels like a workaround. It’s a workaround of bilateral agreements and it’s a workaround of Australian jobs.”

Australian and International Pilots Association president Captain Tony Lucas.

Virgin Australia has previously criticised Qantas for using foreign cabin crew on some international services, including from New Zealand, the UK and Thailand.

The Australian Federation of Air Pilots which represents the majority of Virgin pilots called on the airline to “prioritise Australian crews” in its plans to expand international operations through wet lease agreements.

AFAP executive director Simon Lutton said while they recognised the initial flexibility needed during the launch of new international routes, they advocated a “maximum period” for wet leases and a clear transition plan to Australian crews.

“AFAP is prepared to collaborate with Virgin Australia to achieve these objectives, ensuring that as the airline expands, it does so with a commitment to Australian talent,” Mr Lutton said.

“By leveraging the expertise of its loyal workforce, Virgin Australia can enhance its reputation for safety and service while contributing positively to the Australian economy.”

Mr Lucas previously criticised Qantas for bringing in Finnair to operate flights from Sydney to Bangkok and Singapore, using Thai crew and Finnish pilots in a two-year deal.

But he said at least there was an “end date” to the arrangement after which Qantas pilots and crew would step in – and he challenged Virgin Australia to do the same.

“They’ve just posted a pretty good profit, over half-a-billion dollars, and you’d think off the back of that they would be committing to Australian jobs, and investing in Australia,” Mr Lucas said.

The Flight Attendants Association of Australia was hopeful the arrangement by Virgin and Qatar would be limited to one or two years, before converting to a dry-lease arrangement.

Virgin Australia reported a $545.4m statutory profit before tax for the 2024 financial year, up 322 per cent on the previous year.

Documents lodged with the Australian Securities and Investments Commission show the result was boosted by the expiry of $280.7m worth of future flight credits.

The airline’s US owner, Bain Capital, pocketed the lion’s share of $366.5m in dividends declared within the financial year, and a further $8.7m in unfranked dividends.

Bain Capital holds a 93 per cent stake in the company, and the balance is split between the Virgin Group (5 per cent) and Queensland Investments Corporation (QIC).

Virgin Australia is currently seeking Foreign Investment Review Board approval to sell a 25 per cent stake to Qatar Airways for an undisclosed sum.